- Doximity, a communications and networking tool for medical professionals, is cutting about 100 employees, which amounts to 10% of its workforce, the company announced during its fiscal 2024 first quarter earnings results this week.
- On top of the workforce cuts, the company lowered its revenue and earnings before interest, taxes and depreciation guidance to a midpoint of $460 million for fiscal 2024 revenue and $211 million in EBITDA. It also expects a restructuring charge of $8 to $10 million, which the company will incur in the second quarter of fiscal year 2024.
- Doximity reported total revenue of $108.5 million this quarter, representing an increase of 20% year over year from $90.6 million.
Doximity offers a professional network, a newsfeed of medical articles and news, and productivity tools like telehealth and secure messaging for medical professionals. The company reports that more than 80% of physicians and a growing number of nurse practitioners, physician assistants and pharmacists use its service.
During the company’s earnings call, cofounder and CEO Jeff Tangney pointed to a slowdown in the pharmaceutical industry’s shift to digital adoption and a need to streamline client workforces as the reason behind the company’s workforce cuts.
“These reductions are heaviest in our operations and client service teams, where live client visits, printing and manual HTML edits are just less needed than in the past,” Tangney said.
Doximity will complete a “substantial” portion of the layoffs by the third quarter of fiscal year 2024.
Tangney said clients no longer have time for scheduling meetings, legal reviews, reports and quarterly business reports, adding that needs have changed following the COVID-19 pandemic.
“Post-COVID, they work from home most of the week, and they'd rather log in to a self-service platform, 24/7, to monitor their program results and set budgets,” Tangney said in a call with investors.
Although Tangney attributed the slowdown to a “post-COVID upsell weakness,” he noted the company is optimistic about the long term, and that it plans to use the more than $230 million in recent share buybacks to “help return value to shareholders.”
“We've learned that our post-COVID upsell weakness has been as much due to technology and operational inefficiencies as macro-malaise,” Tangney said. “The good news is this is curable and we're treating it.”
Doximity is not the only healthcare company to reduce its workforce this year. Teladoc cut 6% of its workforce, or 300 jobs, in January. Meanwhile, CVS is eliminating 5,000 jobs as part of ongoing expense reduction measures.